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French airlines: Small companies lacking support

Among the sectors most affected by COVID-19, the French aviation sector is in difficulty. Between a first lockdown which already interrupted all commercial airline activity in March 2020, with an impact felt during the summer … Airlines and the sector as a whole are now facing a second lockdown. A period when trips are usually numerous. Indeed, with the approach of the end of year celebrations, many families meet again. Some travel by plane, if they live far away. Given the situation, marked by confinement, and the strict health measures that prevent family reunions … This is a second blow for the French aviation sector.

A cautious flight program, the French airline calls for more support

For small airlines, the situation is more than delicate. On the one hand, this situation is defined by incomprehension. General aid is available to most sectors of activity … And on the other hand, specific aid to the aviation sector is only offered for Air France, the national airline, associated with the Dutch leader KLM. Aid promised following the March 2020 episode to the tune of 7 billion euros from France, and 2 to 4 billion euros by the Netherlands for KLM. However, no support is announced for other French airlines. A surprising situation, when we see the number of companies in the French air transport. Among these companies, French Bee is one of the low cost players providing long-haul flights. Flights between France and Saint-Denis de la Réunion, San Francisco, Papeete and soon New York.

However, this company, like the others in the French airline sector, is threatened by the consequences of COVID-19 on traffic in the airports and travel postponements and cancellations. In fact, the Government was already recommending from March 2020 to limit travel, in particular to international travel in order to avoid the spread of the virus. And this impacts not only airlines, but also airport personnel. Thus, within airplanes, flight capacity is already reduced and health measures even more stringent. And as a result, the lack of demand widens the cash flow of these groups. Thus, the French airlines are asking for more support to get through this uncomfortable period. To help them, UNCAF is asking that six measures to maintain employment can be applied to the aviation sector.

Airport tarmac ground plane
Following the announcement of new containment, many airlines are leaving planes on the ground.

Important measures to support employment in the airline industry

The first measure would allow companies to be able to rebuild their cash flow more firmly. In particular, they ask that the repayment of the loan guaranteed by the State be staggered from 5 to 15 years. Given the lack of activity and the delicate situation in which many airlines find themselves … This aid would be a substantial safety cushion. With regard to employment, the leaders also wish to see the maintenance of the partial activity. Maintaining the rate of 84% of net salary, until December 31, 2021. For now, this aid only runs until December 31, 2020. In addition, companies request access to the APLD (Partial Long-Term Activity) with employee activity of up to 20%.

The request also concerns the exemption from social and employer contributions on salary supplements until December 31, 2021. UNCAF also offers direct aid of 800,000 euros for any business that generates a turnover of less than 50 million euros. This, provided that companies have seen a drop in their turnover of more than 60% as of December 31, 2020. Finally, to counterbalance the difficulties of 2020, the UNCAF would like to make 2021 free of charges and taxes on air transport. The French aviation sector is holding its breath, and is trying to cope as much as possible with the year 2020, a very difficult year for tourism, among others.

Sources:

Press Release – UNCAF asks the State for a support plan for small French airlines – November 3, 2020

Travel by plane – French airlines

European Commission – State aid. L a Commission authorizes a French project to grant urgent cash support of € 7 billion to Air France – May 4, 2020

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